© 2010 The Actuarial Profession www.actuaries.org.uk

Current Professionalism Topics

IAA Fund meeting for Asia

Hong Kong, 9-10 May 2012

Professionalism for the actuary

• professionalism is a key component of actuarial education (topic 10 in Core Syllabus of the IAA)

• it is important to devote time to learning about professionalism as well as about technical skills

• it is necessary to develop a professional attitude and way of thinking – there are often no simple black and white answers

• we need to learn what it means to do a good professional job • …and keep on learning

Characteristics of a profession

6 key characteristics of a profession are:

• members join together to apply a specialised skill • the skill has been developed through appropriate education • members have a special relationship with those served • recognised by the public as an authority in field of expertise,

able to serve the public interest • standards of competence and conduct of members • high level of integrity by members in exercising judgement

Customer focus

Business values

Ethical values

Respect

Openness

Integrity

Transparency

Honesty Efficiency

Performance

Forward thinking Trust

Profitability Customer focus

Reliability Teamwork

Quality

Responsibility

Fairness

Customer focus

Professional Business values

Ethical values

Respect

Openness

Integrity

Transparency

Honesty Efficiency

Performance

Forward thinking Foresight

Trust

Profitability Customer Client focus

Reliability Teamwork

Quality

Responsibility

Fairness

Ethical values which are also professionalism issues

• trust, honesty, integrity • openness, transparency, accountability • good communications • not being misleading • respect and support for others • confidentiality • avoidance of conflicts of interest • compliance • speaking up

Other ethical issues (beyond professionalism?)

• bribery and corruption • fraud • bullying and harassment in the workplace • gender (and other forms of) discrimination • unethical marketing • excessive executive remuneration • environmental concerns • work/home balance

Beyond ethics - other professionalism issues

• fiduciary relationship • objectivity/impartiality • quality of professional services • taking into account the interests of those affected • quality of documentation and ‘audit trail’ • checking and review of work and calculations • life-long learning – developing our knowledge and skills

What is expected of us as professional people?

• demonstrating, and applying appropriately, specialist skills • providing reliable up-to-date technical knowledge and advice • behaving ethically • complying with Profession’s code of conduct and standards • performing statutory roles to a high standard • exercising judgement with high level of integrity • having due regard to the interests of those affected

(continued)

What is expected of us as professional people? (continued)

• respecting and supporting others • relationship of trust with clients (fiduciary relationship) • communicating well • assisting the profession to serve the public interest • contributing to public debate • contributing to the work of the profession

• education • quality control • research • professional guidance • discipline • reputation and standing • influence

The Role of a Professional Body

• association of associations • focus on professionalism • a global profession • development of quality and standards • core educational syllabus • responsive committee structure • sections for individual members

International Actuarial Association (IAA)

• properly constituted as association • code of conduct which meets minimum requirements • disciplinary scheme which meets requirements • educational syllabus for becoming fully qualified actuaries • due process for adopting standards of practice (before adopting

any standards) • payment of annual dues to the IAA

International Actuarial Association (IAA) - membership requirements

The actuarial profession is recognized worldwide as a major player in the decision-making process

within the financial services industry, in the area of social protection and in the management of risk,

contributing to the well-being of society as a whole.

Vision Statement of IAA

Having a code of conduct meeting the IAA minimum is one of main requirements to be fulfilled before an actuarial association can be admitted as a Full Member Association of the IAA (and of the Groupe Consultatif)

Minimum Code of Conduct of IAA

• An actuary shall perform professional services with integrity, skill and care (client responsibility) – fulfil professional responsibility to client or employer – fiduciary relationship with client

Minimum Code of Conduct of IAA (a)

• An actuary shall act in a manner to fulfil the profession’s responsibility to the public (common good) – uphold the reputation of the actuarial profession – not engage in false or misleading advertising or business

solicitation

Minimum Code of Conduct of IAA (b)

• An actuary shall perform professional services only if competent and appropriately experienced – an association may permit derogations, e.g. – where client would be disadvantaged if advice denied – where actuary is working with another fully competent and

experienced actuary

Minimum Code of Conduct of IAA (d)

• An actuary shall, in communicating professional findings, show that he/she takes full responsibility for them – indicate whether the actuary is available to provide

supplementary information and explanation

Minimum Code of Conduct of IAA (f)

• An actuary shall not perform professional services involving the actuary in an actual or potential conflict of interest – unless ability to act is unimpaired (no inhibition); and – there has been full disclosure of actual or potential conflict – Associations may require that an actuary may only act in

these circumstances if all principals have expressly agreed to it

Minimum Code of Conduct of IAA (h)

• Integrity • Competence and Care • Impartiality • Compliance • Open Communication

The Actuaries’ Code (Institute & Faculty of Actuaries) (effective 1 October 2009)

Integrity Members will act honestly and with the highest standards of

integrity • show respect • confidentiality • honest, open and truthful in promoting services

The Actuaries’ Code

Competence and Care Members will perform their professional duties competently and

with care • appropriate level of knowledge and skill • keep competence up to date (CPD) • understand who your client is • care for client – make sure advice is appropriate • new appointments

The Actuaries’ Code

Impartiality Members will not allow bias, conflict of interest, or the undue

influence of others to override their professional judgement • objective and uncompromised advice • avoidance/management of conflicts of interests • should consult with previous adviser

The Actuaries’ Code

Compliance Members will comply with all relevant legal, regulatory and

professional requirements….. • challenging non-compliance • speaking up

The Actuaries’ Code

Open Communication Members will communicate effectively and meet all applicable

reporting standards • clear and appropriate communication for

– the intended audience – the purpose of the communication – the significance of the communication for the audience – the capacity in which the member is acting

• accurate and not misleading

The Actuaries’ Code

© 2010 The Actuarial Profession www.actuaries.org.uk

Case Studies

IAA Fund Meeting for Asia

Hong Kong, 9-10 May 2012

• Integrity • Competence and Care • Impartiality • Compliance • Open Communication

Principles of professionalism to apply to case studies

• CD1 Challenging another actuary • CD2 Ethical concerns • CD3 Reporting (blowing the whistle)

Generic Case Studies